A bank account hold is a restriction on your bank account that temporarily limits your availability of funds. Common reasons for account holds are related to the bank needing additional time to clear deposit funds from a noncash deposit, multiple deposited checks in a short period of time or a check deposit that appears to have issues. A financial institution may also implement an account hold for fraudulent or suspicious activity. Hold times vary depending on the reason for the hold, the account agreement and an account holder’s banking history.
What Is An Account Hold?
An account hold means the bank or credit union is putting the brakes on your fund availability. Why, how and for how long depends on your account agreement, financial institution and banking history.
Why Banks Place Holds on Accounts
Financial institutions put holds on bank accounts for a variety of reasons with one goal in mind: to protect themselves and their account holders. Restricting access to funds is a time-out that ensures that neither the bank nor the customer loses money.
Large and Noncash Deposits
If your account is in good standing and you haven’t had issues with insufficient funds, you might still encounter an account hold if you present your bank with an unusually large deposit, cashier’s check, certified check or out-of-state check deposit.
Your financial institution wants to ensure a bank account deposit will clear before it becomes part of your account’s available balance. This protects the bank but also ensures you won’t be hit with lots of overdraft fees if the check bounces.
If you have a new account, especially one less than 30 days old, you may be more likely to encounter a hold until you develop a history with your financial institution. Check your account agreement to learn if there are specific holds for new accounts.
Your bank might detect a red flag regarding a check deposit’s ability to clear or notice activity that indicates you may be a victim of identity theft. In those cases, your account might be placed on hold until the bank can verify that the check is valid and your identity is safe.
According to the Office of the Comptroller of the Currency (OCC), when a check or money order is presented for deposit and later determined to be fraudulent, the account holder is responsible for checks written against that amount and any resulting bank fees.
Can Any Bank Account Be Placed on Hold?
Most deposit accounts, such as checking, money market or savings accounts, can be placed on hold for any of the reasons above. Depending on the grounds, a bank may put a hold on a particular transaction or an entire account.
How Long Can My Bank Put My Account on Hold?
Hold times on bank accounts can vary depending on the circumstances for the hold, the particular bank account agreement and the status and history of the deposit account. But federal regulations outlined by the Federal Reserve limit how long a bank can limit fund availability.
The Expedited Funds Availability Act of 1987 addressed hold lengths, and the Federal Reserve notes that the Check Clearing for the 21st Century Act of 2003 helped to expedite the check-clearing process.
Regulation CC that cash deposits, wire transfers and certain check deposits must be part of an account holder’s available balance by the next business day after the business day that the deposit was made.
Some check deposits can encounter a longer hold. Still, the OCC says a bank must generally make the first $225 of the deposit available by the next business day and the remainder by the second business day unless something is wrong with the check or the deposit account.
According to the OCC, a reasonable time for a routine hold is five business days. However, delays can take much longer if your bank determines that a fraud investigation is needed.
How Do I Remove A Bank Account Hold?
Most bank account holds resolve themselves quickly once the bank has verified the check and sufficient funds to release the check amount into the deposit account balance.
The OCC advises that in most instances, your financial institution should provide you with a written communication about the hold. You can also call or visit the branch in person to learn why the hold was initiated in the first place and what the bank’s policy is.
If you feel your bank isn’t complying with federal law regarding your hold, you file a complaint with the FDIC, Federal Reserve Board or another appropriate regulatory agency.
What Is a Debit Card Hold or ACH Deposit Hold?
While online banking allows bank deposits and other transactions to happen instantaneously, there are sometimes holds on related funds. For instance, the Automated Clearing House (ACH) might display your direct deposit as pending until the funds clear. Issues with ACH holds can be discussed with your bank.
A debit card hold isn’t a hold on your whole bank account. Instead, it is a temporary preauthorization hold on the purchase amount until the official transaction clears. It reserves only the amount of the pending transaction so that it is no longer part of the account holder’s available balance. Issues with debit holds can be discussed with the merchant and, if necessary, your bank.
- Federal Reserve: Regulation CC
- The Federal Reserve: Regulation CC: Availability of Funds and Collection of Checks
- Office of the Comptroller of the Currency: I Deposited Several Checks/Money Orders That Were Fraudulent or Did Not Clear. The Bank Took the Money From My Checking Account and Then Froze And/or Closed My Account. Can It Do This?
- Office of the Comptroller of the Currency: I Deposited a Check. When Will My Funds Be Available / Released From the Hold?
- GovInfo: Expedited Funds Availability Act of 1987
- Federal Reserve: Regulation CC (Availability of Funds and Collection of Checks)
- Office of the Comptroller of the Currency: A Friend Wrote Me a Check. My Friend’s Bank Has Released the Funds, but My Bank Hasn’t Released the Hold. Can My Bank Do This?
Melissa is a writer and editor from Chicago, with a background in small business ownership. After selling her business, she moved into marketing for nonprofits and now manages volunteers at a large medical association. She is a writing and editing contractor and contributed to dozens of blogs and websites.